How to get started with DAX index trading

Why you should start trading the DAX

When someone mentions “index trading,” most people immediately think of the S&P 500 or NASDAQ. But there’s another way. Faster. More dynamic. And often easier to read.

We’re talking about the DAX index – the main German stock index and one of the most actively traded markets in Europe. For beginner traders, DAX offers a great chance to explore the world of intraday trading.

The DAX moves fast, it’s reactive, and if you know what you’re doing, it can serve up great trading opportunities almost every day. Plus, you’re trading during European hours, so no need to stay up late for the U.S. markets.

What is the DAX index and how does it work

DAX stands for Deutscher Aktienindex and includes the 40 largest and most actively traded German companies listed on the Frankfurt Stock Exchange.

Think of it as the European cousin of the Dow Jones Industrial Average – a selection of the biggest players in Europe’s strongest economy.

It used to be called DAX 30, but in 2021 it expanded to DAX 40 to better reflect the market. Big names you’ll recognize in the index include Siemens, SAP, BMW, Adidas, and Volkswagen.

How the DAX index value is calculated

The DAX is calculated based on market capitalization. The bigger the company, the more it influences the index. It also uses something called a performance index, which includes dividend payments in the overall value, not just the stock price.

In practice, you don’t need to worry too much about the formula. What matters is that DAX moves quickly and responds well to technical setups, making it a favorite for many intraday traders.

Why beginners should trade the DAX index

If you’re just starting out with trading and looking for a market where you can quickly learn to read charts, analyze price movements, and develop your own trading strategy — the DAX is exactly what you need. Here’s why:

• High volatility: The DAX moves. Every day. Even when other markets are flat, the DAX often gives you dozens of points worth of daily movement. That makes it a perfect environment for intraday traders.

• Low spreads and high liquidity: Because of its massive trading volume, the DAX comes with tight spreads and low trading costs. You’ll experience faster order execution and less slippage — both crucial for short-term trading.

• Daytime trading hours: The DAX is active mainly during European market hours. It opens around 9:00 AM CET, with peak activity before lunch and again after the U.S. markets open (around 2:30 PM CET). In short: No need to trade at night.

• Technically clean behavior: The DAX often respects classic technical levels like support, resistance, and price patterns. If you’re learning price action, moving averages, or trendlines, you’ll find that the DAX tends to “respect the rules” and respond in a predictable way.
• Zero commission for opening positions: DAX is a stock index, and we do not charge commission on stock indices at Fintokei. This means you have more money in your account to trade with!

DAX vs. U.S. markets: What makes it unique

Sure, U.S. indices are popular. They’ve got massive volume, a long history, and global influence. But for a beginner, they can feel overwhelming. They often start moving later in the day, and they’re heavily influenced by U.S. economic data and news.

The DAX, on the other hand, is fast, sharp, and accessible. You’ve got more time during the day to analyze setups, plan your trades, and actually watch the market — without being hit by overnight surprises from Wall Street.

How to trade the DAX: First steps and beginner strategies

You can find the DAX index on most trading platforms, but it’s often listed under a slightly different name. Look for:

• GER40
• DE40
• Sometimes also called Germany 40 or just DAX
  

You’ll trade it through CFD contracts, which means you can speculate on both rising (long) and falling (short) prices — even with a small account.

Most common DAX trading strategies for beginners

The DAX has one major advantage — it responds really well to technical analysis. That means it often respects support and resistance levels, price action patterns, and moving averages. That makes it a great training ground for anyone learning to trade intraday.

Here are three proven strategies you can start testing right away:

Scalping strategy (timeframe: M1–M5)

• Quick entries and exits based on simple patterns (e.g. pin bar, inside bar)
• Works best just after market open (around 9:00 AM CET) when volatility spikes
• Goal: grab a few points quickly and exit

Intraday trend trading (M15–H1)

• Use moving averages (e.g. EMA 20 and EMA 50) to follow the trend after a pullback
• Ideal for traders who prefer 1–2 solid setups per day
• Goal: ride a bigger move during the session

Breakout strategy after morning consolidation

• Watch for a tight range after market open (between 9:00 and 9:30 AM)
• Enter as soon as price breaks out above or below the range
• Works great with volume or price action confirmation

You can test all of these strategies on a demo trading account to see which one fits your style. The key is not to trade impulsively — the DAX gives you new opportunities almost every day. No need to force trades that aren’t there.

When to trade the DAX: Key times and market events

The DAX is available to trade via CFDs almost 24/5, from Monday to Friday. But the most important price action happens during the European trading session:

• 9:00–11:30 AM CET – the most volatile time, right after the Frankfurt Stock Exchange opens
• 2:30–5:00 PM CET – second wave of movement when U.S. markets open and economic news drops
  

In the morning, you’ll often see the first intraday trends or consolidation ranges. In the afternoon, there’s usually more momentum or breakouts. If you’re short on time, just focus on the first 2–3 hours after the open.

Economic news that moves the DAX

Even though it’s a German index, the DAX reacts to macro events from the entire eurozone — and especially the U.S. Here are the key ones to watch:

• German reports: IFO Business Climate, ZEW Sentiment, GDP, Industrial Production
• ECB decisions: interest rate announcements, press conferences
• U.S. data: CPI (inflation), NFP (jobs), PMI, Retail Sales

What to watch out for when trading the DAX

DAX je atraktivní, ale má i svá specifika:

• Volatilita: Můžeš vydělat hodně, ale i rychle ztratit. Riziko je nutné řídit.
• Slippage a spready: V době zpráv nebo nízké likvidity se může spread rozšířit.
• Držení pozic přes noc: Pokud držíš DAX CFD přes noc, počítej s náklady na swap. Doporučujeme držet spíš intradenně.

The DAX is exciting, but it has its own quirks. Here’s what to keep in mind:

• Volatility: You can make money fast, but also lose it just as fast. Risk management is everything.
• Slippage and spreads: During news events or low liquidity, spreads may widen.
• Overnight holding costs: If you keep DAX CFD trades open overnight, you’ll pay swap fees. That’s why it’s better suited for intraday trading.

Conclusion: DAX trading as your entry point into index markets

The DAX is an ideal market for anyone who’s serious about trading. It offers high volatility, clean price movements, and trading hours that actually suit European traders.

But what matters most? Unlike some strategies where you wait for hours (or days) to see results, the DAX gives you feedback fast, often the very same day.

Beginner traders often bounce from one market to another, chasing setups and losing focus. The DAX gives you a chance to stick with one instrument, learn how it behaves, and build up your skillset over time.

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